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How big of a problem is identity theft?
Identity theft is a significant problem and it grows each year.
- About 1.6 million Americans were victims of ID theft and tax refund crimes through June 2013, in comparison to 1.2 million in all of 2012, according to the Treasury Inspector General for Tax Administration.
- Additionally, the Department of Revenue adds about 1,500 identity theft tax fraud cases each year.
- It is estimated that the nation lost about $24.7 billion to tax criminals in 2012, according to the U.S. Department of Justice.
What do identity theft criminals do with people’s information once they’ve stolen it?
Once an identity theft criminal has stolen someone’s personal information, he/she could submit a fraudulent tax return on the taxpayer’s behalf, take out a loan or credit card in the taxpayer’s name, or drain the taxpayer’s bank account.
What happens to a person if his or her identity is stolen?
Victims of identity theft may lose significant money and time and may find their reputation and credit rating has been damaged, affecting the ability to obtain loans for education or housing, approval for rental agreements, and approval for credit cards or large purchases requiring credit.
What should someone do if his or her identity is stolen?
The first thing to do is freeze your credit. You can do that through the Office of the Indiana Attorney General’s Identity Theft Prevention Toolkit at www.in.gov/attorneygeneral/2853.htm. This website will also give you information about the next steps to take.
However, Hoosiers should be proactive before their identities are stolen by following simple tips for protecting their information, such as being suspicious of scams, shredding documents they don’t need and filing their taxes electronically.
How could identity theft affect someone’s taxes?
A criminal could submit a fraudulent tax return on behalf of a taxpayer and have the tax refund sent to himself or herself. And when the taxpayer does submit a return, it can be stopped from being processed because our system already shows a return filed for that taxpayer. The taxpayer is then not able to receive the refund he or she is entitled to until taxpayer proves his/her identity has been stolen, which can be a stressful process.
Are kids susceptible to ID theft?
Yes. Unfortunately, many criminals steal children’s identities. Identity thieves steal children’s information and falsely claim them as dependents on their tax returns for larger refunds. It is, therefore, equally important that parents check the credit reports of their children annually as well so that they don’t find out their identities were stolen when the children are grown up trying to get a credit card or loan.
How can I protect my identity?
Some simple, but important tips to protect your information include:
- Protect your financial documents. They contain your name, address, bank information and Social Security number. Shred documents you don’t need and keep ones you do need locked in a secure place.
- Do not give a business your Social Security number just because they ask.
- Do not carry your Social Security card with you.
- Protect your financial information – shred important papers and do not just throw them away.
- File your taxes electronically.
To learn more tips and ways you can protect yourself from becoming an identity theft victim, visit www.in.gov/dor/5033.htm
How do I know if my identity has been stolen?
There are several clues that your identity has been stolen including when you:
- notice there are withdrawals from your bank or credit card charges you did not make
- get bills that are not yours
- are notified that more than one tax return has been filed in your name
For a complete list of clues your identity may have been stolen, visit www.in.gov/dor/4794.htm.
If you think you might be a victim or are a victim of identity theft, visit www.in.gov/dor/5034.htm.
What would you say is the most important thing to remember to protect my identity?
Limit access to your Social Security number and sensitive personal information. Don’t give it to people just because they ask for it.
I know that I should limit the people to whom I give my Social Security number. To whom do I definitely need to give it?
What is most important to remember is that you should never give your Social Security number (SSN) to a person with whom you do not make initial contact. For example, if someone calls or emails you, do not give them your SSN. It is safe to give your SSN to government agencies including the Indiana Department of Revenue, Internal Revenue Service, or your employer once you have verified the organization.
How do I check my credit?
You should check your credit report if you suspect identity theft, and can check your credit up to three times per year. However, it is recommended that you check it at least every 12 months for free by directly contacting the three credit report agencies – Experian, Equifax, and TransUnion.
Please note that the Indiana Department of Revenue or IRS will never ask for any financial or personal information via email.
Can I trust my accountant, tax preparer, or enrolled agent?
In general, yes you can. However, be sure to carefully choose who does your taxes for you. For a list of tips on finding a creditable tax preparer, visit www.in.gov/dor/4618.htm.
Is filing electronically safe?
Yes. E-filing is the most secure way to file your taxes. When you e-file, your return is processed automatically and electronically through secure connections. Taxpayers who are eligible can file their individual income taxes online for free using INfreefile (www.freefile.dor.in.gov).
E-filing is significantly more secure than paper filing. A paper return is handled by dozens of people – postal processing, mail clerks, letter opening, paper organizing, return scanning, the person who reviews and approves information and possibly many others. The list goes on and on. There several opportunities for identity theft with a paper return.
Why is electronically filing safer?
E-filing is significantly more secure than paper filing because a paper return is handled by dozens of people from the time you place it in a mailbox to the time it is processed by the department. There are a lot opportunities for identity theft with a paper return. When you e-file, your return is processed predominately by computer. This means the fewest possible chances for identity theft.
However, it is still important that taxpayers who file electronically store the electronic documents safely. Once their tax return has been electronically filed, taxpayers should save the file to a CD, USB drive, or external drive and then delete the file from your computer. Then, store the device in a safe, locked place.